Apple: Pacific Crest Ups Target, ’09 EPS Estimate
Pacific Crest’s Andy Hargreaves this morning raised his price target on Apple (AAPL) to $235 from $225, and upped his EPS estimate for the September 2009 fiscal year to $6.55 from $6.20. The moves reflect his bullish views on the prospects for the iPhone.
Hargreaves contends the new business model for the phone improves near-term cash flow, but does change the overall profitability of the device. He says the initial subsidy–which he puts at $350 per unit, higher than the $325 estimate calculated by Oppenheimer’s Yair Reiner–will roughly offset the net present value of monthly payments the company received from AT&T under the model used for the first version of the phone.